Estes Park News

State education situation a boggle times three

How educators are tied up with legislation to 'help'; Lobato Lawsuit up for review in Colorado Supreme Court in March

By Juley Harvey

Trail-Gazette

Posted:
02/21/2013 06:49:14 AM MST

You may have heard the old joke: "We're from the government. And we're here to help."

Three efforts to "help" the taxpayers by Colorado state legislators have combined to embroil the state educational atmosphere in a sticky cauldron. Estes Park R-3 school superintendent Patrick Hickey, who really wants to help, said Monday that it's extremely unlikely that these three impediments will be unknotted and resolved, to create any "help" for education. The terrible threes are: TABOR, the Gallagher amendment and Amendment 23. Additionally, he said, the Lobato Lawsuit, decided in favor of the plaintiffs in December of 2011 (basically, school districts and parents, versus the state, on financing uniform educational opportunities statewide)will be reviewed by the Colorado State Supreme Court in March, after appeals by the state were filed.

Hickey said that Sen. Mike Johnston has undertaken an effort to help with the funding situation.

Johnston describes the effort as a way to begin dealing with both the inadequacy of school funding and the inequity in the way it's distributed. "Our theory of change was that we were working toward a grand bargain to build a 21st-century school system," he said.

The proposal's outline includes: a funding increase to early childhood and special education programs, the elimination of the legislative device that has been used to cut K-12 funding by more than $1 billion in recent years, an adjustment to funding weights that currently give some districts extra funding over more at-risk districts, a change in how student enrollment is tallied to produce a more accurate count, and the creation of an "innovation fund" to help districts produce homegrown education reforms.

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"We have a fundamental problem with adequacy, and we don't provide an equitable system," he said. "Solving both of those problems ought to be our work."

Hickey agrees and said that Johnston has proposed a $1-billion plan, requiring new money and voter approval (replacing the $4-billion statewide assessments the legislature currently requires). Hickey said that Johnston has described the legislature's effort as having a Ferrari in the garage, without any gas.

Hickey said that TABOR, Gallagher and Amendment 23 have brought us to this impassable juncture.

Variuous websites provide the following information on these components. The Taxpayer Bill of Rights (TABOR), passed in 1992, imposes the strictest revenue and spending limits in the nation. It also prohibits any tax increase without a vote of the people; places strict limits on how much revenue the state can keep and spend; requires any revenue collected in excess of TABOR's revenue limits — at every level of government, including school districts — to be refunded to the taxpayers, unless the voters decide to "de-Bruce" (i.e., allow the government to retain the "excess"). This provision of TABOR was suspended at the state level for five years (2006-2011,) as a result of the passage of Referendum C.

Hickey said he has not spoken to anyone who disagrees on taking a vote of the people when it comes to a tax increase.

The Gallagher Amendment, passed in 1982, was designed to maintain a constant ratio between the property tax revenue that comes from residential property and from business property. However, Hickey said the commercial property is assessed at three times the residential level and a shift occurred in state funding. It "flipped," from the 60-40 split of local community taxes, to state funding providing more.

The effect of Gallagher was to reduce the assessment rate (the percent of property value that is subject to taxation) whenever residential property values increased faster than business property values. As a result of the Gallagher Amendment, the assessment rate for residential property has declined by about two-thirds since 1982, due to population growth and increases in residential real estate values.

The net effect has been a marked decline in revenues collected from property tax, which prior to Gallagher, provided the majority of school funding. Schools — other than the Estes Park R-3 district — are funded by a combination of local (property) and state revenues. Estes Park R-3 is funded exclusively by property taxes. The Gallagher Amendment formula has limited local revenues by cutting the residential assessment rate by two-thirds since its passage in 1982.

From 1982 until 1992, districts could make up for the lower assessment rate by increasing their mill rate (property tax rate). In addition, the state had the flexibility to increase state spending to make up for the amount that property taxes used to cover.

But with the passage of TABOR in 1992, a combination of budget formulas made it increasingly difficult to fund schools. TABOR's revenue limits automatically cut mill rates in districts across Colorado, and at the same time, TABOR limited the state's ability to prop up school funding with state dollars.

Gallagher and TABOR combined to shift the burden of school funding from local property taxes to the State General Fund. Thus, the State's General Fund provides more than 60 percent of school funding, whereas it used to be less than 40 percent.

After nine years of Amendment 23, we are finally spending about as much per child as we did in 1989, adjusted for inflation, educators say. Amendment 23 uses an inflation measure that is much lower than the actual cost increases that school districts encounter because of what they purchase: health care, energy, transportation, pensions, etc. As a result, districts' actual purchasing power is far below 1989 levels, educators say.

On Jan. 23, 2012, Great Education Colorado released the following statement on the state's appeal in the Lobato case.

"Now that the appeal is filed, we hope and trust that the parties will expedite the process as much as possible. Colorado's students don't get do-overs. For them, justice delayed is education denied.

"This appeal comes just as the Colorado Department of Education released its estimate of cuts that each district can expect under current budget proposals. Funding for schools is currently slated at $327 million below what it would take to maintain current services and $1.1 billion below what schools would be receiving if the state were still honoring Amendment 23. Put another way, although CDE expects 8,990 more students in Colorado schools next year, funding will be $48 million lower.

"The State's appeal presents one more delay on the way to a school funding system that provides the resources necessary to meet the State's own vision: that "[a]ll students in Colorado will become educated and productive citizens capable of succeeding in a globally competitive workforce."

"In light of the Lobato decision and the damage that a fourth year of deep education cuts will do to Colorado's students, to our constitution and to jobs and our economic recovery, the legislature should waste no time in working to honor our students' right to a thorough and uniform education system."

The trial in the lawsuit challenging Colorado's school funding system opened in Denver District Court Aug. 1, 2011. Lobato v. State of Colorado challenges both the state system's level of funding and the method of determining funding, including the Public School Finance Act, categorical programs and capital construction.

The plaintiffs — a group of 26 parents and 21 school districts (including Estes Park R-3) — say the state's current system does not meet constitutional requirements. The defendants say requiring more funding for education would bankrupt the already cash-strapped state. The court ruled Dec. 9, 2011, in favor of the plaintiffs.

Hickey said that even given the dire economic outlook, Estes Park R-3 school district continues to provide a cost-effective educational environment, in comparison to neighboring school districts, which have higher mill levy rates. He again commended the community for its goodness in providing the mill levy override that has allowed the district to continue functioning, although doing more with less.

Community members must decide what they value — more kids enrolled, more money, more opportunities, more options — and then try to create that picture, he said.

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